They are changing us!

Each year, FORTUNE publishes its lists. Everyone is familiar with the Fortune 500 list of the biggest companies. Not everyone is familiar with the “40 under 40” list of the most influential people in the world under the age of 40. I never made that list. I’m sure that I consistently ranked 43^rd, 44th. I have often wondered who these people really are, what they did to get the high rating, and what makes them so influential. If I had known that years ago, I might have at least come in 42^nd.

I spent a few years in the business world. In retrospect, the best and the brightest made the difference. They seemed to be better educated, They saw the long-term better, They had a vision, and they took measured risks. I suspect the same is true today. It’s always been that way, except this time it’s different.

People over 60 years old, and those under 25 years old should consider the “40 under 40” list required reading. It helps us understand how the world has changed, how it is changing, and it points us to the future.

Technology, obviously, dominates the list of new young companies led by young people. Time was when a person needed years of experience to rise to the top of a major corporation. Not so much anymore! Kids start companies in the college dorms, expand them when they leave the ivied halls, get the financing they need, and grow to a billion dollars in a few years. What do those companies do? What do they make? What value do they bring to the world? None of those questions is easy to answer.

A few years back the “40 under 40” list would have included Steve Jobs, Bill Gates, Steve Wozniak, and others who changed our world. Let’s look at those who are changing our world today.

The number one most influential person on the list is Kevin Systrom, co-founder and CEO of Instagram, which is owned by Mark Zuckerberg’s (tied for #1) Facebook.

Systrom founded the photo-sharing company in 2010. Today it serves one billion users per month who want to share pictures with their friends.

Brian Chesky, #5, founded Airbnb, an online hospitality company, in 2009. The company has 4.0 million rooms for rent in 34,000 cities and handles about 100 million web searches each month.  

Xu Li, #7, cofounded Bytedance in 2010. The company specializes in data mining that allows people to aggregate news the way they want it presented. It also furthers China’s strategy of being the leader in Artificial Intelligence (A.I) in the field of machine learning.  

Dhivya Suryadevara, #4, is CFO of General Motors. I think they make cars and trucks. She has degrees from India and her MBA from Harvard.  

Katrina Lake, #8, cofounded Stitch Fix, a subscription-based personal shopping platform in 2011. Its two and a half million users provide revenue of about $1.0 billion per year.  

Rena Kalioby, #40, founded AFFECTIVA in 2009. It trains machines to recognize human feelings – “emotion A.I.” It has captured visuals of 6.8 million people to date and compared them to their emotions at the time of the photo.

What does that all mean? To say that change is in the air is a gross understatement. Do any of these companies create value? That depends on your definition of value.

They create thousands of jobs and billions of net worth for millions of people. The data tell the story about the future. Jobs will go to those who train in technology and highly skilled professions. Low skilled people will struggle to find meaningful work. It does not take many people to create a company with a huge market cap.

GM has a market cap of $53 billion and employs 180,000 people. Facebook, on the other hand, has a market cap of $504 billion, but only 25,000 employees. Bytedance has a market cap approaching $45 billion with only 4,000 employees. Apple is nearly at a $1.0 trillion market cap with only 123,000 employees. Change is coming. A.I. is everywhere.

The Fortune 500 was traditionally a compendium of manufacturers and financial institutions. Most made something that people wanted.

 Most of the companies on the “40 under 40” list don’t really make anything. They process data, they provide platforms for social communications, business analysis, and strategic alignments. Do we need these companies? Maybe it’s for the millennials to decide.

The “40 under 40” are a big influence in the world. They are leading us to the future, in a direction we may not have chosen, understood, or even dared to risk. This list of leaders consists of highly educated, multi-degree folks that surely fit comfortably among the best and the brightest the world has to offer. It’s always been that way, except this time it’s different. 

Ready for Disruption!

I went to the grocery store the other day. They make it easy to shop. Each item has a shelf tag that shows the price of the item. I like that!

Grocery stores have low gross margins, so they need to lure customers with good prices, good selections, and good service. Most stores put a flyer in newspapers on Wednesday listing their specials. You can compare one store’s prices to the other’s, and decide if it’s worth the gas to drive four more blocks to save a few cents.

Car dealers place price stickers on the window of their cars, fueling stations post the price for each grade of gas on big signs. Department stores have price tags on most items. Restaurants have menus that tell you the ingredients of each dish and its cost.

Most hospitals, doctors, and other medical providers don’t list prices. I don’t like that!

What does your local hospital charge for a knee replacement? How much is an X-ray? How about a night in the hospital? How much does your doctor charge for a physical? What does the Lab charge for a blood test? Why aren’t prices posted in the lobby of clinics and hospitals? Then you could decide if it’s worth driving a few extra blocks to save hundreds of dollars.

 A well-respected regional hospital in the Northeast, with which I’m familiar, has this on its website:

            Healthcare billing and insurance issues can be complicated.

Professional fees are not included on your hospital bill. You will be billed separately by your attending physician, anesthesiologists, radiologist, pathologist, and other specialties.

A hospital serving The Villages of Florida, a huge retirement enclave, posted this on its website:

… we understand how overwhelming it can be to deal with health issues and billing issues on top of that. We know that your medical bill and insurance details can get confusing. It is our goal to make the process as easy as possible for you.

A hospital chain in Sacramento has this on its website:

Please note that you may receive more than one bill for services received at the Medical Center. Physician charges, may include bills for Radiologists, Anesthesiologists, Cardiologist and Pathologists, and will be billed separately. Physicians are independent of the hospital and bill for their services separately.

If grocery stores took the same approach as your local hospital, they might post this on their website:

We understand that grocery billing is complicated and can be overwhelming. Most fees are not included when you check out. The farmers, fertilizer companies, meat packers, box companies, food-testing agencies and other specialties, will bill you separately.

The U.S. has some of the best-trained doctors in the world. It has great research facilities, it has the latest technologically advanced equipment and highly skilled nursing and other patient care professionals.

Best of everything, however, doesn’t deliver the best results across a broad range of measures. The U.S. spends double the percent of Gross Domestic Product (GDP) on health care as other developed countries but ranks last in nearly every category of efficiency and effectiveness.

We don’t get much bang for our buck because healthcare isn’t an integrated, holistic system. Our science is first-class but our systems and processes are from medieval times. Doctors are in “private practice.” Medical specialties have their silos. Hospitals allocate their operating rooms to the surgeons with the most business. Big Pharma works in its silo. A hospital’s billing practices sometimes infer that they are hotels. with medically related room service.

When we compare the U.S. to eleven other developed nations,[i] we come up short: our access to medical care ranks last, in large part, because we don’t have universal healthcare. We rank last in information flow between primary care and specialist because of the dearth of integrated systems; we have the highest rate of mortality amenable to health care, and our life expectancy dropped each of the last three years.

We have one of the highest infant mortality rates in the world.

The administrative costs account for as much as 31% of total hospital expenses.[ii] One study found that administration cost is about 0.67% per doctor in large medical groups.[iii] The lack of a national approach to healthcare delivery results in unsustainable expenses with poor results; management systems and processes are antiquated, payment systems are outdated and pricing processes are decades behind the business world. Our great doctors and nurses in a dark-ages medical world that reduces quality outcomes. Healthcare is ripe for major disruption.

We see disruptions today unimaginable ten years ago: Airbnb is the largest hotel chain in the world, Uber and Lyft compete to be the largest taxi company in the world, Ma Bell isn’t in the telephone business anymore, and Bitcoin is chasing real money. We are only a few years away from driverless cars, making car ownership obsolete.

We face two gigantic challenges: how to lower healthcare costs dramatically and how to bring medical outcomes up to world standards, and then surpass them. Systemic change usually takes twenty years; however, modern disruption strategies take five to ten years or less. Amazon’s purchase of Pill Pak is a good example. Most drug stores could go out of business in ten years. Amazon will deliver pills to your home in individual doses with date and time to take them, at very low prices. They won’t have the cost of middleman distributors and prescription management companies who eat up rebates and pay pharmacies. The entire drug distribution system is ready for a major disruption.

The current model of doctors in private practice is unsustainable because of its inefficient delivery model. It too is ready for disruption. In addition, Artificial Intelligence (AI) is set to take over most of the diagnostic challenges doctors face every day and the methods to remedy ailments. We see that already in many kinds of personalized cancer treatment protocols. Universal healthcare will provide primary care to everyone, reduce illness, improve delivery systems, and reduce costs. A single-payer system would reduce costs even more.

What does a highly efficient and effective healthcare delivery system look like? The healthcare system to which I belong has over 4.3 million members in Northern California; it operates 21 hospitals, 242 medical offices, and outpatient facilities. It has 8,900 doctors and 23,000 nurses on its payroll.[iv] It has great management systems. Admittedly, scale helps this kind of system. An easy, but not necessarily accurate, way to describe the system is that the insurance company and the medical practices are one system. Because of the organization and management systems, it is able to control costs and provide outstanding customer service.

Doctor clinics, labs, radiology, outpatient surgery, pharmacies, physical therapy and more are integrated into one efficient operation. On-line services are outstanding; making doctor appointments, ordering meds, email, and doctor consultations are all available on a smartphone or computer. It’s obvious that they understand Lean Management and Six Sigma quality measurement. I like that!

Medical systems across the country are slowly moving to the single provider model, with the hospital as a focal point. It will take a massive disruption to effect significant reductions in health care costs and improvements in healthcare outcomes. Not only is the pharmacy industry about to see a major makeover, but the day of the private practice-doctor has less than twenty years before it disappears. Integrated medical practices, processes, systems, and administration have the potential to lower medical costs by 20% out of the bag. We know this because we can compare our costs with those of other countries.[v]  

Ask your doctor what he charges for a regular visit, for a physical, or how much per day your hospital charges per day. Don’t let the blank stares scare you.

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[i] Mirror, Mirror 2017 – International Comparison Reflects Flaws and Opportunities for Better U.S. Health Care – The Commonwealth Fund

[ii] Becker Hospital Review – CFO - 2009

[iii] Health Affairs - 2011

[iv] https://share.kaiserpermanente.org/article/northern-california-fast-facts/

[v] Mirror, Mirror 2017 ibid

There is a time!

“To everything there is a season … a time to plant and a time to pluck up …[i]

It was time for pluck but had I known the level of frustration involved, I might have lived with the current state of affairs a little longer.

 It wasn’t earth-shattering, mind you, but the annoyance level was high. I wouldn’t want to do it more than once every ten years.

It was increasingly hard to get through a conversation on the oldest phone. Our carrier dropped off the face of the earth in mid-sentence. Even with a personal cell tower in our house, service was intermittent. The second phone was serviceable enough. The tablet, almost an original, was nearly useless. By all indications, technology had passed us by. Kids and grandkids rolling their eyes were the norms.

Staying with our current carrier was an acceptable option only if we could be satisfied with updated equipment but poor service. It was time for a change. Off we went to the large competitive carrier looking for the simplest solution to our dilemma.

Phone number one was too old to work on their system or qualify for a rebate. The second phone wasn’t compatible with their system either but qualified for a modest rebate. The tablet engendered a broad smile or was it a sneer.

 A simple opportunity to upgrade some equipment resulted in three hours of in-store discussion, and information exchange between one device to another,  and further hours on the phone with the corporate “customer loyalty” department to erase the activation fee they charge customers for each phone and tablet. They want to charge new customers to do business with them. Really?

I bought my first mobile phone in 1991. That was back in the day when it was a phone. I could make calls on it and I could receive calls. I upgraded to something better every year or so.

In 1994, I installed a phone in the car. Very modern and up-to-date. It required a microphone above the sun visor, a speaker behind the seat, and a big flip phone in a cradle that was atop a flexible post between the front seats. We removed the antenna on the back window to go through the car wash.

Flying back and forth to the mid-west and east cost required making a phone call when you landed so that the phone knew where you were.

When traveling from The City to the East Bay, I would wait until I had gone through the Caldecott Tunnel before calling home because it saved on roaming charges and long distance charges.

When we started using our new phones we discovered that, yes, most of the data transferred, but not all of the passwords for the apps. Almost all of the apps needed updating and reinstallation. That wasn’t too hard.

I started with the Weather Channel, then Facebook, Starbucks, Google, Amazon, Wells Fargo, Translate, Solitaire, Cribbage, KDFC, Pandora, Linkedin, Uber, Kindle, Amazon Alexa, SacBee, MLB at Bat, Kaiser Permanente, Netflix, OpenTable, Park Mobile, Golfshot Plus, Sky Guide and of course, My Verizon.

It turned out that many of the apps could be downloaded from the cloud, which should have been easy since it was such a cloudy day, but as you might suspect, it wasn’t. Going from a joint account to separate accounts requires new usernames, new passwords, new processes, and who knows what.

When I went to high school, I used an Underwood typewriter that my mother’s father had used. It was simple. The basic keyboard was the same layout – asdfg hjkl; - it lasted for generations. The sales clerk told me that phones and tablets are really meant to be replaced every couple of years. Really? Why do phones require such frequent upgrading? Aren’t they constructed well? The answer is simple. They are not phones after all.

We walk around with computer platforms that have a phone app on them, along with the choice of a million other apps. The phones are well made I suspect, but the technology moves too fast for the platforms to keep up. I wonder if we could get along ok without all those apps?

Maybe we could. But if we didn’t have them, how would we reserve a space in the parking garage at the Kings game or get a 20-minute warning that the parking meter is running out of time without Park Mobile? How would we make a reservation at a restaurant without Open Table? How would I know the distance to the flag on the golf course without Golfshot Plus, or be able to identify the stars and planets at night without Sky Guide? How would I make appointments with doctors and get lab results without the Kaiser Permanente app? How would I get a ride without Uber, read a book without Kindle, or listen to music without Pandora? How would I deposit a check from home without my Wells Fargo app? How would I buy from Amazon without their app?

It was really an inconvenience to set up all those conveniences. Well, anyway, we should be good for another ten years, at least. Or, maybe two?

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[i] Ecclesiastes 3: 1-8

… even the President says so …

There is an epidemic in our country: people calling the police on other people, especially those of color or minorities, who are doing nothing wrong. Its individuals walking up to strangers, mostly people of color, and telling them to leave the country or stay out of their neighborhoods. Is it a reflection of the fear so many experiences on a daily basis, or is it pure racism?

A video on You Tube[i] went viral last week. It raised racism to new heights. The dustup occurred in the LA area when a woman yelled at and harangued a 27-year-old Latino who was working in a customer’s yard.

“Go back to Mexico,” she yelled as she crossed the street to shout epitaphs at the man and his mother. 

Mr. Guzman, it turns out, is a citizen of the US, a college graduate with a steady professional job, and a homeowner. His mother cleans houses and yards for her customers. He helps her on weekends.

 Mr. Guzman confronted the woman. “Why do you hate us?  

 “Because you’re Mexican,” she said.

 “We are honest people right here.”

 “Ha-ha… Yeah... Rapists and animals!” The accusations went on to include drug users and gang membership.

“Do you believe what you are saying?” Mr. Guzman asked the woman.

“Of course, because I heard it on the news.”

“Do you believe everything you hear on the news?”

“Yes… even the President says so.”

I believe that she really does believe that Mexicans particularly and Hispanics, in general, are thieves, rapists, drug users and any other accusations you want to pile on. She believes it because even the President says so.

Between talk radio and cable news outlets, and agenda-driven newspapers, we are reliving a world punctuated by Yellow Journalism. The late 1800s saw Yellow Journalism flourish between two competitive New York City newspapers. Their owners, Joseph Pulitzer and William Randolph Hearst preferred sensationalism to facts. Both had agendas and both reported in ways that supported their agendas.

Cable TV and talk radio, The Huffington Post, Red State and other newspapers are today’s equivalent of Yellow Journalism, more concerned with sensationalism than fact. The lack of journalistic integrity is a major reason why hate and distrust permeate our land, why our social fabric is fraying, why our value systems are called into question almost daily, and why our politics is so polarized that Congress is in a perpetual stalemate.

An old adage says that what comes out of your mouth is a reflection of what is in your heart. Donald Trump tweets what is in his heart, and that makes him partially to blame for our current state of affairs. A large minority of the people support his vision for the country. Another large group dislikes his vision and direction. So be it! That is what happens in a democracy.

Trump’s approach, however, is different from other presidents, and in the end, is a disservice to the nation. His tweets and general comments are usually negative, debasing, and impolite, to say nothing of the overwhelming narcissism. He does not show respect for the office he holds.

A casual review of the President’s tweets for May and June 2018 shows comment after comment, day after day, that debase people, that call them names, that mock them, and that invigorate his base.[ii] A deeper review of the President’s tweets displays falsehood after falsehood. Extreme right-wing radio, TV, blogs, and newspapers pick up the falsehoods and publish them as truths. Sensationalism triumphs again, and legitimate journalism is called fake news.

The President’s tweets and his public comments resounded with his followers and echoed his sentiments. Almost overnight, it became legitimate, again, to call people names, to ban immigrants because of their religion, to be derogatory to minorities, to ask citizens of color to go back home and to separate children from their families.

 We have to find a way to survive this assault on our way of life. Where do we start?

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[i] https://www.youtube.com/watch?v=9JmcRHIBmZM

[ii] http://www.trumptwitterarchive.com/archive